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Bond bids proceed to movement by way of, 10-year Treasury yields right down to lowest in two weeks | Forexlive


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That is fairly the drop in yields this week, with the height in 10-year yields having hit 3.20% on Monday. We’re now 35 bps down from there to 2.85% because the bid in bonds proceed to remain the course this week.

There are many transferring elements on the subject of bond market flows in the mean time and there are not any straightforward solutions.

The selloff in equities is one that might lend some security flows however amid deleveraging pressures in latest weeks, that hasn’t a lot so been an actual issue driving bond market sentiment. However it’s one which may be partly in play for now.

Apart from that, the stronger argument maybe is that we have now reached ‘peak hawkishness’ on the subject of the Fed – a minimum of for now. The market is aware of very properly to count on a minimum of two extra 50 bps price hikes and a push in direction of 3% Fed funds price.

That is perhaps a ok sign for bond merchants to take their foot off the fuel pedal.

However within the greater image, with inflation pressures more likely to be extra persistent in maintaining at the next degree, one can count on yields to additionally preserve extra elevated amid expectations that central banks will preserve with tighter coverage to attempt to rein that in.



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